B-216801, FEB 1, 1985, 85-1 CPD 126

B-216801: Feb 1, 1985

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DIGEST: AN ALLEGATION THAT AN AGENCY'S INADVERTENT DISCLOSURE OF THE PROTESTER'S PROPRIETARY INFORMATION ON ONE PROCUREMENT GAVE ANOTHER OFFEROR A POSSIBLE UNFAIR COMPETITIVE ADVANTAGE ON A DIFFERENT SIMILAR PROCUREMENT IS DISMISSED SINCE THE PROTEST DOES NOT PROVIDE A BASIS UPON WHICH GAO CAN GRANT RELIEF. YDA PRINCIPALLY ARGUES THAT IT WILL BE AT A COMPETITIVE DISADVANTAGE IF AWARD IS BASED ON SECOND BAFOS SINCE SOME OF ITS PROPRIETARY DATA FROM ANOTHER SIMILAR PROCUREMENT WAS MAILED TO SINGER BY THE AGENCY FOLLOWING SUBMISSION OF INITIAL BAFOS. SINGER (THE INCUMBENT CONTRACTOR) AND YDA WERE THE ONLY OFFERORS ON THE NORTHLANDS PROCUREMENT. BOTH WERE FOUND ESSENTIALLY EQUAL TECHNICALLY BASED ON THEIR INITIAL PROPOSALS (TECHNICAL FACTORS WERE OF PRIMARY IMPORTANCE).

B-216801, FEB 1, 1985, 85-1 CPD 126

CONTRACTS - PROTESTS - MOOT, ACADEMIC, ETC. - QUESTIONS - NO BASIS FOR RELIEF - DISCLOSURE OF PROPRIETARY INFORMATION, ETC. DIGEST: AN ALLEGATION THAT AN AGENCY'S INADVERTENT DISCLOSURE OF THE PROTESTER'S PROPRIETARY INFORMATION ON ONE PROCUREMENT GAVE ANOTHER OFFEROR A POSSIBLE UNFAIR COMPETITIVE ADVANTAGE ON A DIFFERENT SIMILAR PROCUREMENT IS DISMISSED SINCE THE PROTEST DOES NOT PROVIDE A BASIS UPON WHICH GAO CAN GRANT RELIEF.

YOUTH DEVELOPMENT ASSOCIATES:

YOUTH DEVELOPMENT ASSOCIATES (YDA) PROTESTS THE POTENTIAL AWARD OF A COST -REIMBURSEMENT CONTRACT TO SINGER CAREER SYSTEMS (SINGER) BASED ON A SECOND ROUND OF BEST AND FINAL OFFERS (BAFOS) UNDER REQUEST FOR PROPOSALS (RFP) NO. 1-JC-403-50, ISSUED BY THE DEPARTMENT OF LABOR FOR OPERATION OF THE NORTHLANDS JOB CORPS CENTER IN VERMONT. YDA PRINCIPALLY ARGUES THAT IT WILL BE AT A COMPETITIVE DISADVANTAGE IF AWARD IS BASED ON SECOND BAFOS SINCE SOME OF ITS PROPRIETARY DATA FROM ANOTHER SIMILAR PROCUREMENT WAS MAILED TO SINGER BY THE AGENCY FOLLOWING SUBMISSION OF INITIAL BAFOS. DISMISS THE PROTEST.

SINGER (THE INCUMBENT CONTRACTOR) AND YDA WERE THE ONLY OFFERORS ON THE NORTHLANDS PROCUREMENT, AND BOTH WERE FOUND ESSENTIALLY EQUAL TECHNICALLY BASED ON THEIR INITIAL PROPOSALS (TECHNICAL FACTORS WERE OF PRIMARY IMPORTANCE), WITH YDA LOW AS TO COST. DISCUSSIONS RELATING LARGELY TO COST WERE HELD TO POINT OUT DEFICIENCIES IN THE PROPOSALS, AND BOTH YDA AND SINGER SUBMITTED RESPONSES BY THE AUGUST 22 DEADLINE FOR SUBMITTING BAFOS. YDA'S PROPOSED COSTS REMAINED LOW BUT LABOR FOUND THAT YDA HAD NOT RESPONDED FULLY TO ALL OF ITS CONCERNS AND THAT, BECAUSE ITS FINANCIAL PROPOSAL WAS STILL WEAK IN SEVERAL RESPECTS, THE OFFER COULD NOT BE ACCEPTED FOR AWARD. LABOR ALSO CONSIDERED SINGER'S PROPOSED COSTS UNACCOUNTABLY HIGH AND THUS DETERMINED THAT FURTHER NEGOTIATIONS WERE NEEDED. THESE NEGOTIATIONS WERE HELD ON OCTOBER 10, AND OCTOBER 17 WAS SET AS THE CLOSING DATE FOR SECOND BAFOS.

THE DATA DISCLOSURE OCCURRED IN CONNECTION WITH A PROCUREMENT FOR OPERATION OF THE BRUNSWICK JOB CORPS CENTER IN ATLANTA. THIS PROCUREMENT WAS CANCELED ON AUGUST 21, THE DAY BEFORE THE INITIAL BAFOS WERE DUE ON THE NORTHLANDS PROCUREMENT. WHEN PROPOSALS WERE RETURNED TO THE OFFERORS, THE BUSINESS MANAGEMENT PORTION OF A PROPOSAL SUBMITTED BY AURORA ASSOCIATES (ONE OF TWO JOINT VENTURES COMPRISING YDA IN THE NORTHLANDS PROCUREMENT) WAS INADVERTENTLY INCLUDED IN THE BOX OF PROPOSAL MATERIALS MAILED BACK TO SINGER, ALSO AN OFFEROR ON THE BRUNSWICK PROCUREMENT. SINGER STATES THAT IT IMMEDIATELY RETURNED THE AURORA MATERIALS TO THE PROCURING ACTIVITY WITHOUT EXAMINING THEM.

YDA CLAIMS THAT THE DATA MAILED TO SINGER BETWEEN THE FIRST AND SECOND BAFO CLOSING DATES INCLUDED PRICING MODELS AND METHODOLOGIES FROM WHICH SINGER COULD DETERMINE HOW YDA CALCULATES ITS COSTS. YDA WOULD ACCORD NO WEIGHT TO SINGER'S STATEMENT THAT IT DID NOT REVIEW THE AURORA MATERIALS AND ARGUES THAT AN AWARD BASED ON SECOND BAFOS WOULD BE IMPROPER DUE TO THE POSSIBILITY SINGER HAS GAINED AN UNFAIR COMPETITIVE ADVANTAGE FROM AURORA'S MATERIALS. YDA ALSO ARGUES THAT THE DISCLOSURE SHOULD BE VIEWED AS A TECHNICAL LEVELING AND THAT, DUE TO THE DISCLOSURE, THE SECOND ROUND OF BAFOS CONSTITUTED AN IMPROPER AUCTION. YDA ASKS THAT AWARD BE BASED ON THE INITIAL PROPOSALS OF FIRST BAFOS; THAT SINGER BE EXCLUDED FROM THE COMPETITION; OR THAT SINGER'S BRUNSWICK PROPOSAL BE GIVEN TO YDA. LABOR ADVISES OUR OFFICE, HOWEVER, THAT IT IS PROCEEDING WITH THE SECOND BAFO EVALUATION, AND THAT IT STILL INTENDS TO BASE THE AWARD ON THE OUTCOME OF THIS EVALUATION.

THE INADVERTENT DISCLOSURE OF YDA'S BRUNSWICK PROPOSAL MATERIALS TO SINGER DOES NOT IN ITSELF PROVIDE A BASIS UPON WHICH OUR OFFICE CAN GRANT RELIEF. EVEN IF WE ASSUME THAT, AS YDA ALLEGES, THE BRUNSWICK DATA WAS PROPRIETARY AND, IN FACT, GAVE SINGER INSIGHT INTO YDA'S COST PROCEDURES, THE DISCLOSURE OCCURRED IN CONNECTION WITH ANOTHER NOW VOID PROCUREMENT, AND WE ARE AWARE OF NO REMEDY APPROPRIATE FOR FUTURE PROCUREMENTS. OTHER WORDS, THERE SIMPLY IS NO APPROPRIATE MEANS FOR ERADICATING ANY ADVANTAGE SINGER MAY HAVE GAINED FOR THIS AND FUTURE SIMILAR PROCUREMENTS. THIS LINE OF REASONING WAS THE BASIS FOR OUR DISMISSAL OF THE PROTEST IN WHITE MACHINE CO., B-206481, JULY 28, 1982, 82-2 CPD PARA. 89. THERE, TOO, THE AGENCY INADVERTENTLY DISCLOSED THE PROTESTER'S PRICING INFORMATION FOR ANOTHER PROCUREMENT TO ITS SOLE COMPETITOR UNDER AN ONGOING PROCUREMENT.

THE REMEDIES SUGGESTED BY YDA ARE NOT APPROPRIATE UNDER THE CIRCUMSTANCES. WHILE AN AWARD BASED ON INITIAL PROPOSALS OR THE FIRST BAFOS WOULD NEGATE ANY ADVANTAGE SINGER COULD HAVE GAINED FROM YDA'S DATA, IT ALSO WOULD PRECLUDE THE AGENCY FROM NEGOTIATING IN THE GOVERNMENT'S BEST INTEREST. AS DISCUSSED ABOVE, LABOR CALLED FOR SECOND BAFOS ONLY BECAUSE IT FOUND YDA'S FIRST BAFO HAD INADEQUATELY ADDRESSED SEVERAL OF THE CONCERNS RAISED AS TO ITS PROPOSED COSTS. THE RECORD INDICATES YDA'S PROPOSED COSTS REMAINED SIGNIFICANTLY BELOW LABOR'S OWN 2-YEAR ESTIMATED BUDGET, AND THAT YDA'S SCORE FOR COST REALISM, QUITE LOW AFTER THE INITIAL EVALUATION, INCREASED ONLY MARGINALLY AFTER FIRST BAFOS. WE HAVE HELD THAT AN AGENCY PROPERLY MAY CALL FOR A SECOND ROUND OF BAFOS WHEN A VALID REASON EXISTS FOR THE ACTION. SEE TYMNET, INC.; GTE TELENET COMMUNICATIONS CORP., B-209617, B-209617.2, APR. 12, 1983, 83-1 CPD PARA. 384. WE THINK LABOR'S CONCERN WITH THE REASONABLENESS OF YDA'S PROPOSED COSTS (AS WELL AS THE EXCESSIVENESS OF SINGER'S COSTS) CONSTITUTED SUFFICIENT JUSTIFICATION FOR PROCEEDING WITH THE SECOND ROUND OF BAFOS PRIOR TO AWARDING A COST REIMBURSEMENT CONTRACT, EVEN IN LIGHT OF A POSSIBLE RESULTING ADVANTAGE TO SINGER.

YDA ARGUES IN THIS REGARD THAT THE SECOND ROUND OF NEGOTIATIONS WAS UNNECESSARY SINCE IT MERELY RESTATED CONCERNS RAISED BY LABOR DURING THE INITIAL NEGOTIATIONS; YDA BELIEVES ANY REMAINING DISCREPANCIES IN PROPOSED COSTS COULD BE NEGOTIATED WITH THE SUCCESSFUL OFFEROR. THE FACT THAT CERTAIN POINTS MAY HAVE BEEN THE SUBJECT OF EARLIER DISCUSSIONS, HOWEVER, DOES NOT ELIMINATE THE NEED FOR FURTHER DISCUSSION ON THE SAME POINTS WHERE THE AGENCY HAS DETERMINED THAT THE OFFEROR'S INITIAL RESPONSE WAS UNSATISFACTORY. GIVEN THAT YDA'S BAFO COST PROPOSAL REMAINED SIGNIFICANTLY BELOW THE GOVERNMENT ESTIMATE, IT APPEARS TO US THAT FURTHER DISCUSSION OF YDA'S PROPOSAL WAS WARRANTED. YDA HAS NOT ATTEMPTED TO SHOW WHY ITS RESPONSES IN ITS FIRST BAFO SHOULD HAVE BEEN DEEMED FULLY RESPONSIVE TO LABOR'S CONCERNS AND, THUS, HAS NOT ESTABLISHED THAT THE SECOND ROUND WAS UNNECESSARY.

FURTHER, LABOR CORRECTLY POINTS OUT THAT IT WOULD HAVE BEEN IMPROPER TO AFFORD ONLY THE APPARENT SUCCESSFUL OFFEROR AN OPPORTUNITY TO MODIFY ITS PROPOSAL. SINCE LABOR REPORTEDLY CONSIDERED NEITHER PROPOSAL ENTIRELY ACCEPTABLE AFTER THE FIRST ROUND, YDA'S APPROACH WOULD UNFAIRLY PERMIT ONE OFFEROR, BUT NOT THE OTHER, TO MAKE ITS PROPOSAL ACCEPTABLE. SEE WINDHAM POWER LIFTS, INC./QUALITY PLUS EQUIPMENT, INC. - REQUEST FOR RECONSIDERATION, B-214287.2, JUNE 18, 1984, 84-1 CPD PARA. 638.

THE REMAINING TWO REMEDIES YDA SUGGESTS-- EXCLUSION OF SINGER FROM THE COMPETITION ALTOGETHER OR DISCLOSURE OF SINGER'S PROPOSAL FOR THE BRUNSWICK PROCUREMENT-- ARE EQUALLY INAPPROPRIATE UNDER THE FACTS OF THIS CASE. WE REJECTED THE FORMER REMEDY (EXCLUSION) AS A VIABLE ALTERNATIVE IN WHITE MACHINE CO., B-206481, SUPRA, REASONING THAT ELIMINATING COMPETITION ALTOGETHER IS NOT A DESIRABLE MEANS OF REMOVING A POSSIBLE COMPETITIVE ADVANTAGE GAINED BY ONE OFFEROR THROUGH AN INADVERTENT AGENCY DISCLOSURE. THE SAME REASONING APPLIES HERE. AS FOR THE LATTER ALTERNATIVE (DISCLOSURE), IT WOULD BE INAPPROPRIATE TO REQUIRE AN OFFEROR TO DISCLOSE ITS PROPRIETARY BUSINESS INFORMATION SIMPLY BECAUSE IT MAY HAVE BENEFITED FROM AN AGENCY'S INADVERTENT DISCLOSURE OF ANOTHER OFFEROR'S PROPOSAL FROM ANOTHER PROCUREMENT.

YDA CITES SEVERAL OF OUR PRIOR DECISIONS IN SUPPORT OF ITS RECOMMENDED REMEDIES. SEE, E.G., THE FRANKLIN INSTITUTE, 55 COMP.GEN. 280 (1975), 75-2 CPD PARA. 194; SWEDLOW, INC., 53 COMP.GEN. 139 (1973); TM SYSTEMS, INC., B-185715, MAY 4, 1976, 76-1 CPD PARA. 299. THESE CASES DID NOT INVOLVE THE INADVERTENT DISCLOSURES OF PROPRIETARY BUSINESS INFORMATION FROM A DIFFERENT PROCUREMENT, HOWEVER, AND, THEREFORE, ARE NOT RELEVANT. IN TM SYSTEMS, INC., FOR EXAMPLE, THE PROTESTER'S PRICE FOR THE CURRENT PROCUREMENT-- RATHER THAN PROPRIETARY DATA FROM A DIFFERENT PROCUREMENT-- WAS DISCLOSED TO A COMPETITOR WHICH THEREAFTER ATTEMPTED TO LOWER ITS OFFERED PRICE BELOW THE PROTESTER'S. SINCE DISCLOSURE DID NOT INVOLVE GENERAL BUSINESS INFORMATION, COMPETITION COULD BE SOMEWHAT EQUALIZED BY REQUIRING THE COMPETITOR TO REVEAL ITS PRICE AND THEN GIVING BOTH OFFERORS A CHANCE TO SUBMIT REVISED PRICES. WE SPECIFICALLY REJECTED THE ALTERNATIVE REMEDY OF HAVING THE AGENCY BASE THE AWARD ON INITIAL PROPOSALS SINCE, AS HERE, THE AGENCY WAS CONCERNED THAT THE PRICES AS SUBMITTED WERE NOT REASONABLE. SWEDLOW, INC., INVOLVED A SIMILAR PRICE LEAK AND, SINCE A SOLICITATION DEFECT NECESSITATED A RESOLICITATION IN ANY CASE, WE HELD ONLY THAT CANCELLATION WAS PROPER; WE DID NOT DECIDE WHETHER SOME OTHER REMEDY FOR THE DISCLOSURE WOULD HAVE BEEN APPROPRIATE. THE FRANKLIN INSTITUTE INVOLVED AN INFORMATION LEAK, BUT NOT AN INADVERTENT DISCLOSURE BY THE AGENCY; ONE FIRM'S EMPLOYEE IMPROPERLY ATTENDED A TECHNICAL MEETING BETWEEN THE AGENCY AND A COMPETITOR WITHOUT IDENTIFYING HIMSELF. WE RECOMMENDED NO SPECIFIC REMEDY BUT, RATHER, LEFT IT TO THE AGENCY TO DECIDE WHETHER TO EXCLUDE THE FIRM OR AMEND THE SOLICITATION TO ELIMINATE ANY COMPETITIVE ADVANTAGE. YDA DOES NOT CITE WHITE MACHINE CO., B-206481, SUPRA, THE CASE WE CONSIDER TO BE CONTROLLING HERE.

IN VIEW OF OUR FINDING THAT LABOR PROPERLY PROCEEDED WITH A SECOND ROUND OF BAFOS, IT FOLLOWS THAT WE DO NOT CONSIDER THE REOPENING OF NEGOTIATIONS AN IMPROPER AUCTION OR THE DISCLOSURE OF YDA'S BRUNSWICK PROPOSAL TANTAMOUNT TO IMPROPER TECHNICAL LEVELING. TECHNICAL LEVELING OCCURS WHEN A CONTRACTING OFFICER HELPS BRING ONE OFFEROR'S PROPOSAL UP TO THE LEVEL OF OTHER PROPOSALS BY POINTING OUT WEAKNESSES RESULTING FROM THE OFFEROR'S LACK OF DILIGENCE, COMPETENCE, OR INVENTIVENESS. SEE GENERALLY THE ADVANTECH CORP., B-207793, JAN. 3, 1983, 83-1 CPD PARA. 3. PROHIBITED AUCTION TECHNIQUES ESSENTIALLY CONSIST OF INDICATING ONE OFFEROR'S PRICE TO ANOTHER DURING NEGOTIATIONS, THEREBY PROMOTING DIRECT PRICE BIDDING BETWEEN OFFERORS. FEDERAL ACQUISITION REGULATION, SEC. 15.610(D)(3), 48 FED.REG. 42,102, 42,203, (TO BE CODIFIED AT 48 C.F.R. SEC. 15.610(D)(3)). THE NORTHLANDS CONTRACTING OFFICER USED NEITHER OF THESE TECHNIQUES IN CONDUCTING NEGOTIATIONS WITH SINGER AND YDA. THE INADVERTENT DISCLOSURE OF INFORMATION FROM A DIFFERENT PROCUREMENT IS JUST THAT AND CLEARLY DOES NOT FALL WITHIN THE ABOVE PROHIBITIONS.

THE PROTEST IS DISMISSED.